IRS Gives Tax Dodging Workers $3M in Bonuses

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Apparently it’s okay to be a tax dodger if you work for the Internal Revenue Service.

The federal tax agency doled out nearly $3 million in performance awards to thousands of employees who either didn’t pay their taxes or had severe “conduct issues.”

A new report from the IRS’s watchdog shows that between October 2010 and December 2012, more than 2,800 employees with recent “substantiated conduct issues resulting in disciplinary action” received $2.8 million and more than 27,000 hours in time-off as awards for their performance. Auditors said that at least 1,100 of these IRS employees were not compliant on their federal tax filings.

“While not specifically prohibited, providing awards to employees with conduct issues, especially those who fail to pay Federal taxes, appears to create a conflict with the IRS’s charge of ensuring the integrity of the system of tax administration,” IRS Inspector General J. Russell George said in a statement.

Curiously, the IRS does not take into account tax compliance or misconduct issues when handing out millions of dollars-worth of performance awards every year. In 2012, the agency awarded a total of $86.3 million, the majority of which were performance based. The report divided awards between those going to senior executive service employees—who received an average $14,000, and bargaining unit employees, who received an average award of $944.

The auditors were tasked with examining the agency’s awards program under new federal guidance that requires all agencies to reduce spending on these bonus programs.

The watchdog concluded that the IRS’s program complies with federal regulations to limit awards and expenditures, though they recommended that IRS create a policy requiring management to consider conduct issues and tax compliance when issuing awards.

The IRS agreed with the auditor’s recommendation and said it plans to “conduct a study” this summer for the implementation of such a policy.

This is just the latest unflattering audit of the IRS, which spent the better part of last year embroiled in scandal surrounding the alleged targeting of conservative groups.

The agency’s watchdog has produced a steady stream of scathing reports revealing the lack of oversight over the cash-strapped agency’s sometimes questionable spending. For instance, one report said IRS senior executives had received generous bonuses while the agency was embroiled in scandal. Another, revealed that the agency had spent upwards of $50 million at fancy conferences.

Here are just several other examples of the mismanagement and oversight issues that plague the large federal agency, which employs more than 90,000 workers across the country.

These investigations were all conducted when the agency was under former IRS commissioner Doug Shulman, who stepped down last year. The agency’s new chief, John Koskinen, has said one of his main priorities is to restore public trust in the IRS.